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Showing 121 to 140 of 1193 Records
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2021 (11) TMI 1074 - TELEGANA HIGH COURT
Not permitting to travel abroad - petitioner states that his companions were permitted to go abroad, but, however, he was prevented from going - HELD THAT:- This court is of the view that it would suffice if a direction is issued to respondent No.4 to pass orders on the representation dated 22.10. 2021 submitted by the petitioner. Such information whatsoever sough t by the petitioner shall be given to him within a period of one week from the date of receipt of a copy of this order. Upon receiving in formation, the petitioner is given liberty to avail the appropriate remedies available under law.
Petition disposed off.
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2021 (11) TMI 1073 - ITAT CHENNAI
Estimation of income - Bogus purchases - assessee is unable to justify various expenses including purchases with supporting evidence - CIT-A restrict the disallowance on purchases to the extent of 2.5% - HELD THAT:- AO had made adhoc disallowance on purchases without recording any adverse comments on books of accounts maintained by the assessee for the relevant assessment year - AO has not disputed pleading of the assessee that the auditor has given clean chit to the books of accounts maintained by the assessee and has not made any adverse comments on purchases debited into P&L account. Under these circumstances, we are unable to subscribe to the reasons given by the AO to make adhoc disallowance on purchases
CIT(A), after considering relevant facts and also taken note of fact that there is a decline in gross profit declared by the assessee for the impugned assessment year compared to earlier financial year, has directed the AO to restrict the disallowance on purchases to the extent of 2.5%, fall in rate of gross profit on total turnover for the year. The said findings recorded by the Ld. CIT(A) appears to be logical and on the basis of estimation of gross profit. Therefore, we are of the considered view that there is no error in the reasons given by the Ld. CIT(A) to sustain additions made by the AO towards disallowance on purchases on the basis of fall in gross profit rate declared by the assessee on total turnover. Appeals filed by the assessee and Revenue are dismissed.
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2021 (11) TMI 1072 - ITAT AHMEDABAD
Capital gain - taxability of compensation receipts under normal provisions of the Act - sale of land which is a capital asset u/s 2(14) - As submitted that the amount in question was received by the assessee against its right to receive damages which arose from the arbitration ward and not formed the right to sue as erroneously contended by the assessee - as contended that the amount received was in the nature of compensation and would squarely fall within the definition of ‘capital asset’ under s.2(14) of the Act which is defined in widest possible terms and seeks to an encompass property of any kind and includes any right whatsoever arising from such transactions - whether damages received by the assessee for relinquishment of right to sue in the context of the facts of the case are capital receipt excludible from the definition of Section 2(14) of the Act or not and consequently, such receipts arising from release of right to sue is taxable under the scheme of the Act or not? -
HELD THAT:- In the instant case, the rights of the assessee arising under the sale agreement with the original land owners were frustrated in view of another sale agreement of the same land parcels in favour of other party. The assessee received certain consideration by way of damages as a culmination of ongoing vexatious dispute towards rightful ownership of land parcels in question. The amount arose to the assessee by virtue of arbitral award adhered to by the parties to the dispute. The assessee has received consideration for its release of right to sue. Despite the definition of expression ‘capital asset’ in the widest possible term of Section 2(14) of the Act, a right to a capital asset must fall within the expression ‘property of any kind’ and must not fall within the exceptions. Section 6 of Transfer of property Act which uses the same expression ‘property of any kind’ in the context of transferability makes an exception in the case of a mere right to sue.
The issue is no longer res integra. There are long line of judicial precedents which echoes the view that the right to receive the compensation for release of right to sue on account of breach of contract for sale of land is not a capital asset and thus not chargeable to tax as capital gains. Support is drawn from CIT vs. J. Dalmiya[1984 (5) TMI 32 - DELHI HIGH COURT]; Baroda Cements & Chemicals Ltd. vs. CIT [1985 (12) TMI 55 - GUJARAT HIGH COURT]; CIT vs. A. A. Dehgamwalla & Ors. [1991 (4) TMI 38 - BOMBAY HIGH COURT] - As decided in BHOJISON INFRASTRUCTURE PVT. LTD. VERSUS THE INCOME TAX OFFICER, AHMEDABAD [2018 (9) TMI 1239 - ITAT AHMEDABAD] mere ‘right to sue’, while a capital receipt, is not a capital asset under s.2(14) of the Act and thus compensation received on release of right to sue is not a taxable receipt.
Thus such capital receipts towards compensation do not fall within the sweep of expression ‘property of any kind’ notwithstanding its very wide connotations and consequently such capital receipts (not being capital asset) are not susceptible to capital gain tax having regard to provisions of charging section 45 of the Act. Merely because such right towards compensation surfaced as a result of sale of disputed land would not per se govern its taxability unless such right can be termed as a ‘capital asset’ which it is not.
Thus, in totality, we see no error in the conclusion drawn by the CIT(A) in favour of the assessee under the normal provisions of the Act for excluding impugned capital receipts from ambit of taxation. Hence, We decline to interfere with the first appellate order on this score.
Taxability of compensation on the contours of MAT provisions embodied under section 115JB - HELD THAT:- The compensation received for release of right to sue being a capital receipt is not deemed to be ‘income’ and hence not chargeable to tax. Significantly, the Constitution itself uses the term ‘tax on income’ and the term ‘income’ must be construed in the same manner as the one defined under Income Tax Act. As a corollary, it is impermissible to cover such capital receipts under S. 115JB in an unregulated manner. At this stage, we notice a pertinent plea taken on behalf of the assessee that the receipt being of capital nature does not enter into the computation provision at all and hence, there is no question of including the same in book profits for the purposes of Section 115JB of the Act.
Since capital receipts are not ordinarily construed as income under rudimentary understanding of accounting and tax laws, they do not find a specific mention in Section 10 of the Act and consequently Explanation 1 to Section 115JB of the Act is silent on exclusion of capital receipts. In tandem, on facts, the capital receipt has been credited in appropriation of profits account and is not regarded as income per se in the profit & loss account prepared under schedule VI of Companies Act, 1956. Hence, when the factual position and law is read conjointly, it appears that such capital receipts are not susceptible to tax under s.115JB of the Act. The AO cannot bring such capital receipts to tax by including it in book profit artificially
We concur with the view adopted by the CIT(A) in favour of the assessee towards inapplicability of MAT provisions to the impugned capital receipts. In parity with judicial precedents governing the field, we see no error in the conclusion drawn by the CIT(A) in this regard.
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2021 (11) TMI 1071 - ITAT DELHI
Deduction u/s 80P - Disallowance of deduction on the interest received from Bombay Mercantile Bank Ltd. and Ramgharia Co-operative Bank Ltd. - whether it is a case of parking of surplus funds? - CIT-A deleted the addition - HELD THAT:- It is pertinent to note that in the earlier years on the identical issue revenue’s appeal were dismissed and there is no distinguishing factors pointed out by the Ld. DR in the present appeal as well. Therefore, the matter is squarely covered by the decision of the Tribunal in assessee’s own case for earlier years, [2018 (5) TMI 246 - ITAT DELHI] - Authorities below were not justified in refusing to grant deduction under section 80P of the I.T. Act in favour of the assessee.
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2021 (11) TMI 1070 - ITAT BANGALORE
Exemption u/s 11 - Addition on account of income from Pharmacy Unit - Proof of charitable activity u/s 2(15) - assessee is carrying on activities of the nature of Charitable as defined under section 2(15) and, therefore, is eligible for exemption as per the provisions contained in sections 11, 12 and 13 - whether pharmacy business is not an independent business activity so far as the assessee is concerned? - HELD THAT:- As the assessee has undisputedly maintained the books of account for the hospital separately, the assessee fulfils the condition of maintaining the separate books of account for the integral business activity for all integral business activities of running of a hospital i.e pharmacy shop as well. Therefore, there is no violation of the twin conditions specified in section 11(4A) of the Act.
From the comparison of the language of the two provisions of section 11(4A) and section 10(23C) we find, the language used in the provisions are comparable and, therefore, the common purpose is easily decipherable by the above provisions appearing in to different sections from the Act. Therefore, we agree with the relevant argument propounded by the Ld Counsel for the assessee.
Running of a pharmacy is a necessary requirement for running of a hospital. It is impossibility from medical point of view that the hospital can run without “pharmacy shop” in the premises of the hospital. Considering the same in BAUN FOUNDATION TRUST [2012 (4) TMI 172 - BOMBAY HIGH COURT] has held that maintenance of a pharmacy shop is ancillary to the dominant object of running of a hospital and thus, it is an integral part of the hospital. Actually the pharmacy shop is being maintained by the hospital itself and not by any private contractor. Drawing the medicine from such pharmacy shop by the Doctors in respect of the patients is also evident from the records, commonly maintained in their medical reports. It is not the case of the revenue that the profits earned on pharmacy was not spent for the objects of trust.
Pharmacy is an integral part of the hospital business or not. Considering the above, we are of the opinion, the conditions of maintenance of books of account in respect of the business activity of trading of medicines, which is an integral part of the hospital activities, is not the requirement of the law on the facts of this case. Thus, we affirm the assessee’s contention that the pharmacy shop is an integral part of the hospital business and the same is not hit adversely by the conditions specified in the provisions of section 11(4A) of the Act. Therefore, so long as the transactions of such pharmacy which ancillary/ incidental for the business of a hospital and objects of the trust, the conditions relating to maintenance of separate books of accounts are met within the meaning of section 11(4A) of the Act. Accordingly, grounds raised by the Revenue are dismissed.
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2021 (11) TMI 1069 - MADRAS HIGH COURT
Validity of assessment order u/s 144B - petitioner was unable to participate in the personal hearing - petitioner attempted by press Hyperlink but was unable to open the ITBA portal for the personal hearing. Thus, no personal hearing was not conducted - HELD THAT:- Considering the fact that the petitioner was unable to participate in the personal hearing through video conference and considering the fact that the impugned order has been passed by the first respondent even before the 2nd date fixed for Video Conference, the impugned order cannot be sustained.
Accordingly, the impugned orders are hereby quashed. Considering the fact that the dispute pertains to the Assessment year 2013-14 2014~15, the first respondent shall pass a speaking order on merits and in accordance with law, preferably, within a period of ninety days from the date of receipt of a copy of this order. The respondents are directed to give appropriate instructions to the Web Portal Administrator to facilitate the petitioner to file reply, if any, within a period of 30 days and to give a link for the personal hearing through video conference on the date to be fixed by the first respondent.
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2021 (11) TMI 1068 - ITAT AHMEDABAD
Late payment of Provident Fund u/s 36(1) (va) r.w.s.2(24) - delay in depositing the employees’ contribution to Provident Fund by the employer assessee when seen with reference to due date of accrual of salary - HELD THAT:- We observe that the decision of the Hon’ble Gujarat High Court Gujarat State Road Transport Corporation [2014 (1) TMI 502 - GUJARAT HIGH COURT] does not apply where the payment has been made on or before the due date. The deduction under s.36(1)(va) in such case is available without any fetters.
It may be pertinent to observe that disallowance under s.43B r.w.s. 36(1)(va) of the Act in respect of non-payment of provident fund etc. within the due date is not intended to cover genuine and routine cases on late payment but only those where the employer has mis-utilized the funds collected from the assessee.
The addition/disallowance under s.43B of the Act for such delay of bare one or two days in depositing the employees’ provident fund would thus be wholly disproportionate to the default committed, if any. Thus, seen from any angle, the addition/disallowance under s. 36(1)(va) r.w.s. 2(24)(x) of the Act is not justified in the instant case. Assessee appeal allowed.
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2021 (11) TMI 1067 - ITAT PUNE
Rectification u/s 254 - AR submitted that the Tribunal passed the order disposing off all the grounds except ground No.8, which was inadvertently omitted to be argued by him as, therefore, prayed that an opportunity be given to the assessee to argue ground No.8 - HELD THAT:- We recall the impugned order for the limited purpose of disposing ground No.8 taken up in the Memorandum of appeal, but omitted to be argued by the ld. AR during the course of proceedings u/s 254(1) of the Act. The Registry is directed to fix the appeal for hearing for this limited purpose on 22.11.2021. Since the date of hearing was announced in the open court, there is no need to issue any separate notice of hearing. Miscellaneous Application filed by the assessee is allowed to this extent.
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2021 (11) TMI 1066 - ALLAHABAD HIGH COURT
Tax or not - Royalty payment of tax or not - petitioner urged that the royalty payment is tax and not consideration in the context of the privilege parted by the State allowing the petitioner and others to mine sand - HELD THAT:- The payment of GST for grant of mining lease/royalty by the petitioner shall remain stayed.
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2021 (11) TMI 1065 - MADRAS HIGH COURT
Validity of Reopening of assessment u/s 147 - as argued by assessee that detailed objection was filed by the petitioner and without giving a speaking order the impugned order has been passed - HELD THAT:- Though the petitioner did not ask for a speaking order initially, nevertheless the facts on record indicate that before the assessment order was passed, by a communication dated 19.09.2018, the petitioner has asked for a speaking order. In any event, once a notice under Section 148 is issued and reasons given thereafter, it was incumbent on the part of the respondent to have passed a speaking order, in terms of the decision of the Hon-ble Supreme Court [2002 (11) TMI 7 - SUPREME COURT] before passing an assessment order. Considering the same impugned order is set aside and the case is remitted back to the respondent to pass a speaking order and thereafter, complete the assessment in accordance with law.
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2021 (11) TMI 1064 - BOMBAY HIGH COURT
Invocation of Writ Jurisdiction - invocation on the ground that the impugned order has been passed by an officer who lacks jurisdiction - breach of principles of natural justice - HELD THAT:- It is not a case where the petitioners were never afforded an opportunity of hearing. From para 9 (nine) of the writ petition, it is found that notice was issued to the petitioners but their grievance is that time given to appear and represent their case was not sufficient. A distinction has to be made between a case where an order is passed "without notice"/"without opportunity" and a case where an order is passed "without proper notice"/"without reasonable opportunity". Since the case of the petitioner does not fall within the first category, it is not a clear case of breach of the audi alteram partem rule.
The other point raised by Mr. Pathak is that the reply to the show-cause notice has not been dealt with appropriately - HELD THAT:- We do not see reason to hold that this, by itself, would constitute violation of principles of natural justice so as to derail the procedure prescribed by the Act for redressal of grievances against an order passed by the adjudicating authority.
There are no reason to entertain this writ petition - petition dismissed.
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2021 (11) TMI 1063 - DELHI HIGH COURT
Prohibition Benami Property Transactions - change of the Adjudicating Authority - Grievance raised by the petitioners is that vide the impugned order, the respondent no.1 has transferred more than 80 officers in the grade of Commissioner of Income Tax/Directors of Income Tax with immediate effect, including officers who were serving as Members, Adjudicating Authority at New Delhi, for the Prohibition Benami Property Transactions Act, 1988 without taking into consideration the fact that those officers had reserved judgment in a number of cases and therefore while appropriate directions ought to have been passed to deal with this aspect - HELD THAT:- Issue notice. Ms. Nidhi Raman, CGSC accepts notice. She prays for, and is granted, two weeks’ time to obtain instructions and file a reply, explaining the stand of the respondent as also how this issue can be resolved. In its reply, the respondent will also give a comprehensive list of the matters in which judgment has been reserved by the then incumbent officers holding the post of Member, Adjudicating Authority under the Prohibition Benami Property Transactions Act, 1988.
Response thereto, if any, be filed before the next date.
In case, before the next date, the matters are once again listed for arguments before the Adjudicating Authority, it will be open for the petitioners to make a request to the said Authority for adjourning the matter to await the outcome of the present petition, which request, if made, will be considered favourably by the Adjudicating Authority.
List on 22.12.2021.
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2021 (11) TMI 1062 - ITAT JAIPUR
Additions in respect of employees contribution towards ESI/PF - deposit of the employees’s contribution towards ESI and PF though paid before the due date of filing of return of income u/s 139(1) - Scope of amendment - HELD THAT:- In the instant case, admittedly and undisputedly, the employees’ contribution to ESI and PF collected by the assessee from its employees have been deposited well before the due date of filing of return of income u/s 139(1) of the Act. Further, the ld D/R has referred to the explanation to section 36(1)(va) and section 43B by the Finance Act, 2021 and has also referred to the rationale of the amendment as explained by the Memorandum in the Finance Bill, 2021, however, we find that there are express wordings in the said memorandum which says “these amendments will take effect from 1st April, 2021 and will accordingly apply to assessment year 2021-22 and subsequent assessment years”. In the instant case, the impugned assessment year is assessment year 2019-20 and therefore, the said amended provisions cannot be applied in the instant case. See MOHANGARH ENGINEERS AND CONSTRUCTION COMPANY [2021 (8) TMI 563 - ITAT JODHPUR] and SHRI GOPALAKRISHNA ASWINI KUMAR [2021 (10) TMI 952 - ITAT BANGALORE] - Decided in favour of assessee.
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2021 (11) TMI 1061 - ITAT JAIPUR
Delayed employees contribution towards ESI/PF - scope of amendment - HELD THAT:- In the instant case, admittedly and undisputedly, the employees’ contribution to ESI and PF collected by the assessee from its employees have been deposited well before the due date of filing of return of income u/s 139(1) of the Act. Further, the ld D/R has referred to the explanation to section 36(1)(va) and section 43B by the Finance Act, 2021 and has also referred to the rationale of the amendment as explained by the Memorandum in the Finance Bill, 2021, however, we find that there are express wordings in the said memorandum which says “these amendments will take effect from 1st April, 2021 and will accordingly apply to assessment year 2021-22 and subsequent assessment years”. In the instant case, the impugned assessment year is assessment year 2018-19 and therefore, the said amended provisions cannot be applied in the instant case - See SHRI GOPALAKRISHNA ASWINI KUMAR VERSUS THE ASSISTANT DIRECTOR OF INCOME TAX, BENGALURU [2021 (10) TMI 952 - ITAT BANGALORE] - Decided in favour of assessee.
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2021 (11) TMI 1060 - DELHI HIGH COURT
Seeking stay on operation of the impugned order be stayed till the petitioner’s pending appeal - HELD THAT:- The writ petition is partly allowed by directing that till the petitioner’s pending appeal and stay application are taken up for consideration by the Tribunal as and when it becomes functional, both sides will maintain status quo qua the subject matter of the impugned order dated 22.03.2021. Consequently, the respondents will stand restrained from taking any action against the petitioner in pursuance of the impugned order till then.
Petition disposed off.
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2021 (11) TMI 1059 - ITAT BANGALORE
TP Adjustment - comparable selection - Filters applied by assessee in its TP study - Capacity utilization - HELD THAT:- In this case, the exact details of capacity utilisation of comparable companies was not made available to the TPO. It was alleged that the TPO should obtained it by exercising his powers u/s. 133(6) of the Act so as to compare the capacity utilisation of the comparables with the assessee company. In our opinion, it is appropriate to remit the issue relating to adjustment on account of capacity utilisation of the assessee to the file of the AO/TPO for deciding the same afresh keeping in view the OECD guidelines. If the exact details of capacity utilisation of comparable companies are not available in the public domain, the AO/TPO is directed to obtain the same directly from the comparable companies and decide the issue afresh, after affording opportunity of being heard to the assessee
Customs Duty Adjustment - So as to bring uniformity, the customs duty was to be eliminated from the comparable price also to arrive at correct PLI. Accordingly, we remit the issue to the file of AO for fresh consideration.
Adjustment for foreign exchange fluctuations - Higher Import Content of the assessee vis-à-vis comparable companies - This issue was also considered by the Chennai Tribunal in the case of Gates Unitta India Company (P.) Ltd [2017 (4) TMI 1585 - ITAT CHENNAI] direct the TPO to provide considerable exchange fluctuation adjustment while determining the ALP. Accordingly, this issue is remitted to the file of the TPO for determining the ALP after considering the above three components i.e. customs duty adjustment, air freight adjustment and foreign exchange fluctuation adjustment.
Treatment of amortisation of goodwill as operating expenditure - HELD THAT:- As relying on ST-ERICSSON INDIA PVT. LTD. VERSUS DCIT, CIRCLE 24 (2) , NEW DELHI AND VICE-VERSA [2018 (7) TMI 1903 - ITAT DELHI] as held mortization of goodwill is an extra ordinary item and is not pertaining to the regular operation of the assessee, and hence non-operating in nature - issue decided in favour of assessee.
Adjustment, if any, should be restricted to proportionate value of international transaction of the assessee - HELD THAT:- This issue was considered by the Hon’ble Supreme Court in the case of CIT v. Hindustan Unilever Ltd. [2018 (10) TMI 1611 - SC ORDER] wherein it was held that while determining the ALP of international transactions, benchmarking has to be done only on Associated Enterprises transactions and not for the entire turnover. In view of this, we find force in the argument of the ld. AR that the TP adjustment should be restricted only to international transactions pertaining to purchase of raw materials from AEs and other related transactions only. With these observations, we allow this ground of the assessee.
Comparable for software section - erroneous computation of margin - L&T and Persistent were considered as not comparable in the case of CGI Information Systems & Management Consultants (P.) Ltd.[2018 (4) TMI 1755 - ITAT BANGALORE] on the ground that these company was a software product company and segmental information on SWD services was not available - thus we direct exclusion of these two companies from the final list of comparables.
Consider Akshay Software Technologies Ltd. as a comparable.
Technosoft Engineering - As the allegation of the ld. DR is that the complete financials are not made available to the AO/TPO. In our opinion, if the data is not in the public domain, the AO can exercise his powers u/s. 133(6) of the Act to obtain the financials of this company and decide the issue accordingly. Hence this issue is remitted to the AO/TPO.
Evoke Technologies Ltd. is a comparable company. Accordingly, we remit the issue to the AO/TPO with a direction to go through the financials of this company and decide the issue accordingly.
Disallowance of provision for warranty - AO disallowed the provision for warranty contending the same to be contingent liability/ created on estimate basis - HELD THAT:- As difference between the provision amount and the utilization amount is not the benchmark that is required to be considered. What needs to be seen is whether the provision created is on scientific basis. It is submitted that the amount of provision is a factual outcome of the methodology followed in creating provision and utilization would be the actual expenditure incurred against the warranty claims. In the present case, the assessee has followed the scientific methodology based on which provision amount is arrived at.
The assessee follows the specific methodology of creating provision for warranty consistently over the years. The said methodology has been submitted before the AO during the course of assessment proceedings. It creates provision for warranty on a scientific basis.
We direct the AO to examine the assessee’s past record and allow the provision for warranty in the same proportion as compared to the sales as in the earlier assessment years.For this purpose, the AO may consider the data of the immediate past five assessment years and decide the issue accordingly.
Disallowance of annual licence fee - AO disallowed the same contending it to be capital in nature and also that it is not a genuine expenditure while passing the draft order, on the contention that no evidences were submitted supporting the same - HELD THAT:- The claim of the assessee regarding the expenses being for annual licence fees has not been examined at all and that the details / evidences submitted by the assessee before the DRP has not been admitted for consideration, we deem it appropriate to follow the order of the Co-ordinate Bench of this Tribunal in the assessee's own case for Assessment Year 2009-10 [2019 (4) TMI 1929 - ITAT BANGALORE] admit the details filed by assessee before DRP and remand this issue back to the file of the AO with the same directions as contained in the Tribunal order for Assessment Year 2009-10.
Appeal of the assessee is partly allowed for statistical purposes.
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2021 (11) TMI 1058 - GUJARAT HIGH COURT
Non maintainability of appeal on low tax effect - Addition u/s 68 - bogus LTCG on penny stock - Whether the Appellate Tribunal is justified in law and on facts in disposing the appeal of the revenue on account of low tax effect without deciding the appeal on merits even when the issue under appeal was claimed of bogus LTCG on penny stock for which no monetary limits were applicable? - HELD THAT:- This Court in Special Civil Application [2021 (6) TMI 1065 - GUJARAT HIGH COURT] by virtue of the said Circular dated 06.09.2019, the appeals could be filed on merits, irrespective of the monetary limits fixed in earlier cases, if the Board passes special order for filing appeals in cases involving tax evasion activity. The said Circular speaks about the Appeals that may be filed with the special order of the Board in future, and hence could not be construed to have retrospective effect. The Tribunal interpreting the said Circular/ Office Memorandum in the impugned order has rightly observed that in respect of each case or category of cases whether an appeal should be filed in view of the Circular dated 06.09.2019 or not shall be decided by the Board by way of special order, and thus a specific requirement of issuance of special order by CBDT is a must. The Tribunal therefore has rightly held that the CBDT Circular No. 23/2019 dated 06.09.2019 should be read along with the Office Memorandum dated 16.09.2019, in respect of the appeals to be filed pursuant to such special orders of CBDT and shall apply to all the appeals filed on or after 16.09.2019 by the revenue, where the tax effect may be low but the appeal could still be filed by the revenue on merits.
The appeals including the appeal in case of the respondent, which were disposed of by the Tribunal vide the common order dated 14.08.2019 could not be said to have been filed pursuant to the special order of the CBDT in view of the Circular dated 06.09.2019 read with the Office Memorandum dated 16.09.2019, and therefore it could not be said that the Tribunal had committed any mistake apparent from the record, which would require rectification as envisaged in Section 254(2) of the said Act.
In that view of the matter, the Court does not find any illegality or infirmity in the impugned order dated 09.09.2020 passed by the Tribunal dismissing the Miscellaneous Application filed by the petitioner. The petition being devoid of merits is dismissed in limine.
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2021 (11) TMI 1057 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Seeking revival of Resolution Plan - Consensus for Settlement Plan reached or not - HELD THAT:- It is pertinent to mention that the existing Promoter was originally landowners of the land on which the Project "Orion Galaxy" is situated and had entered into the development agreement with erstwhile promoters of the Company to develop the project "Orion Galaxy". However, due to various reasons, the Project could not be completed by the erstwhile promoters on time, and as a result, the existing Promoter took control of the Project in 2017 and finally got complete control of the Company after 31.10.2019 when the existing Promoter purchased 100% shares of the Company after the order of NCLT, New Delhi.
The Company has mainly launched Phase-I of the Project, in which 470 units, out of 542 units, have been sold out. In Phase-II, the Company has booked only 79 units, out of which 57 units have been booked and allotted to related parties, and only 22 units are sold to end-users/customers - The existing Promoter/Suspended Directors of the Company justifying the purported settlement plan submits that "the Company requests to all the Stakeholders of the Company and the Project, to approve the aforesaid revival plan and allow the Management/Promoter to restart the construction.
There are the following major reasons to approve the Revival Plan in the best interest of the Project and the Company:
a) The existing management is fully aware of the Project; in case there is a change in the management, the new management will take time to understand the various aspects of the Project.
b) The CIRP process will only delay and proposed revival plan. However, the existing management will complete the Project within 15 months.
c) The CIRP process will additionally burden the Project with additional costs.
d) There is no clarity on who will bid for the Project and what will be offered.
e) The management has agreed to hand over the Project in a time-bound manner and without any additional cost burden to the Buyer.
f) The existing management will provide an approach road before completion of the Project.
g) The Promoters has agreed to provide Personal and Corporate Guarantee for taking finance for the Project and made the provision and back up to start immediately without wasting any time."
It is important to mention that no settlement plan encompassing all the allottees has been filed to date - It appears that the Appellant made a misleading statement before the Hon'ble Supreme Court that the settlement plan dated 13th February 2020 covers all the allottees. In fact, to date, there is no settlement plan covering all the allottees. There is no consensus among the allottees. Some of the Allottees favour the Settlement Plan, and others oppose the same. There is nothing on record to show that there is consensus for the purported Settlement plan. There is a trust deficit among the homebuyers. The proposed Reverse Insolvency appears to be a device for buying time. Based on the settlement plan and lack of consensus among allottees of flats and the present Promoters, there is no hope of success in arriving at a settlement.
The Settlement Plan dated 12th February 2020 and the further Revised Settlement Plan dated 12th March 2021 deserves to be rejected - However, the settlement process is provided under Section 12A of the Insolvency and Bankruptcy Code, 2016. Therefore, if settlement takes place, the same can be filed U/S. 12A of the Code before the Adjudicating Authority.
The Appeal is listed for hearing on 25th November 2021.
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2021 (11) TMI 1056 - ITAT BANGALORE
TP Adjustment - Exclusion of Infosys BPO Limited & TCS E-Serve Limited - HELD THAT:- In the instant case, the profile of the assessee and that of the profile of assessee in the case of M/s.Indecomm Global Services (India) Private Limited are similar. The assessment year concerned this case and in in the case of M/s.Indecomm Global Services (India) Private Limited is 2012-2013. Therefore, respectfully following the Co-ordinate Bench order of the Bangalore Tribunal in the case of M/s.Indecomm Global Services (India) Private Limited [2019 (8) TMI 1664 - ITAT BANGALORE ] we direct the AO / TPO to exclude Infosys BPO Limited and TCS e-Serve Limited from the list of comparables.
Depreciation Adjustment - HELD THAT:- It is clear if there is difference in depreciation in the case of assessee and the comparable cases, reasonable depreciation adjustment is to be made to determine the arm’s length of the international transaction. On perusal of the TPO’s order and the DRP’s order, confirming the same, it is clear that the directions of the Tribunal in its earlier order has not been given effect to. TPO has admitted that depreciation cost of the comparable companies is lesser than the assessee (since deprecation policy followed by comparable companies is as per Companies Act, whereas the assessee was showing higher rate of depreciation based on some agreement. Hence, suitable depreciation adjustment ought to have been made by AO / TPO. Therefore, this issue is restored to the files of the AO / TPO. AO / TPO is directed to allow depreciation adjustment if they notice the rate of depreciation are different in the case of the assessee and the comparable cases. Therefore, ground 4 is allowed for statistical purposes.
Negative Working Capital Adjustment - HELD THAT:- Admittedly in this case, the assessee is a captive service provider and it is operating on cost plus basis. Therefore, following the order of the Tribunal in the case of ACIT v. e4e Business Solutions India Private Limited [2020 (12) TMI 1255 - ITAT BANGALORE], we hold that there should not be any negative working capital adjustment. It is ordered accordingly. Therefore, ground 7 is allowed.
Deduction of Educational Cess - HELD THAT:- On identical facts, the Bangalore Bench of the Tribunal in the case of DCIT v. GE BE Private Limited [2020 (11) TMI 1057 - ITAT BANGALORE] had held that educational cess is to be allowed as a deduction.We direct the AO / TPO to allow the educational cess as a deduction.
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2021 (11) TMI 1055 - MADRAS HIGH COURT
Protective assessment u/s 143-A - Settlement of case under the Vivad se Vishwas scheme under VSV Act, 2020 - first respondent passed an order under Section 154 by concluding that the petitioner was indeed entitled for refund on sum paid as proportionate tax paid on the advance which was offered as tax by the petitioner and further interest under Section 244A - HELD THAT:- There is no dispute that the petitioner has paid the tax for the relevant assessment year viz., 2011-12 and therefore, the protective assessment for the year 2014-15 results in excess payment of tax. The petitioner cannot be taxed twice on the same income. Ultimately, the purpose of exercising power under the Act is only intended to collect correct and just tax under the provisions of the Income Tax Act, 1961 from an assessee. The Act is not intended either to collect or retain any amount which is not due from an assessee.
In this connection, a reference may be made to the decision of the Hon'ble Supreme Court in Unichem Laboratories Ltd vs. Collector of Central Excise, Bombay [2002 (9) TMI 110 - SUPREME COURT] wherein the Hon'ble Supreme Court held that it is no part of duty of the department to levy and collect tax which is not due to the department.
As the department has also not disputed the fact that the petitioner has settled the dispute under the Vivad se Vishwas scheme for the assessment year 2011-12 as a consequence of which the tax offered and paid by the petitioner during the assessment year 2014-15 had become excess.
That apart, under Section 237 under Chapter XIX of the Income Tax Act, there is no limitation prescribed for granting refund of the amount paid in excess as tax. Therefore, I do not find any merits in the submissions made by the learned Senior Standing Counsel appearing on behalf of the respondents. Therefore, these Writ Petitions deserves to be allowed.
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